CHICOPEE, Mass. (WWLP) – We’re not sure exactly when, but the Federal Reserve this week moved toward the first interest rate increase in nearly a decade. It’s a sign that the economy no longer needs as much support from the central bank stimulus, and continued recovery must involve protection for the future.
“Think about squirrels and what they have to do in the fall. They take nuts and put them away for the winter. We don’t have nuts out away for a future recession if it happens,” said Springfield financial adviser Mark Teed.
Economists predict borrowers have a few more months to take advantage of historically low interest rates on mortgages and car loans. And that means savers will keep losing money on their investments. That includes Americans on a fixed income – a CD rate or social security – people who really need that extra capital.
“You have to count on your mortgage you utilities, I live in a condo so condo fee. There are all things that have to be taken into consideration. When you come to the third week in the month and you’re saying not too much left in the bank,” said Ann Connor of Chicopee.
An interest rate increase depends on a delicate balance of a lot of other factors, like home creation, auto sales, and small business development. In the meantime, it might not be a bad idea to take advantage of zero-interest balance transfers and introductory rates on credit cards. You may also want to consider refinancing your home, and lock in lower mortgage rates before they creep higher.